More than a week has passed since government auditors called on the Pentagon to reopen the bidding of a $35 billion contract to overhaul the Air Force's tanker fleet, but Defense Secretary Robert Gates said on Thursday that he still isn't sure if he will restart the bidding process for the lucrative contract.

"I haven't made any decisions yet," said Gates, weighing in publicly for the first time since the Government Accountability Office's report was released on June 19. "But I would say that I take the GAO report very seriously. They clearly pointed out some areas where we were deficient."

Gates comment was somewhat of a departure from his stance prior to the GAO recommending that the contract be re-bid, because the Air Force made several critical mistakes in evaluating the bids from Chicago-based Boeing Co. and the winning partnership led by Northrop Grumman.

The Air Force announced in late February that it was awarding the contract to build 179 new tankers--what essentially are flying gas stations--to a consortium of Northrop Grumman and European Aeronautic Defense and Space Co., the parent of Boeing rival Airbus SAS.

After Boeing appealed the Air Force's decision to award the contract to Northrop, top Pentagon officials, including Gates, defended their decision and said that the process was fair and transparent.

Since the GAO recommendation was announced last week, Gates said he has met with top Pentagon brass to consider some of the GAO's concerns.

Among the errors the GAO said the Air Force made was not adequately evaluating whether the Northrop plane could fly faster and outmaneuver the service's fighter and transport fleet. There were also concerns that the Air Force made significant errors in calculating the military construction costs associated with the project.

The long and convoluted history of the tanker contract goes back to 2001. A contract to lease new tankers was originally awarded to Boeing but was annulled in 2004 after an ethics scandal led to jail time for two Boeing executives.

The latest setback raises questions about whether the Air Force's procurement program is in total disarray.

When Gates was asked today if he still had confidence in the Air Force's acquisition team, Gates offered a lukewarm endorsement.

"I have confidence in the team until I see something to the contrary," said Gates, who added that he didn't think it would appropriate for him to take a larger role in overseeing the tanker contract.

Lawmakers in Kansas and Washington state--both which both host Boeing plants-- have made it clear that they will work to undo the funding for the project if it's not re-bid, which puts Gates in a tight situation.

"I have already asked for a meeting with Defense Secretary Gates so he can tell me how the Pentagon plans to respond," Sen. Patty Murray (D-Wash.) said in a speech on the Senate floor on Thursday morning. "And I will make it clear the Air Force cannot go forward with this contract - and that I expect it to follow the GAO's recommendations. These are serious findings - no matter how you look at it, this competition was anything but transparent."

It's hard to imagine that the defense department would enter into what would certainly be a politically bruising battle. Gates made it clear that he was cognizant of Congress' leverage.

"The way forward is one of the issues that we are talking about, and we clearly need to have an approach that has the confidence of the Congress, and so we are looking at several options," Gates said.

The GAO recommendations are non-binding, but the defense department has two months to respond to the agency.

Comments

"Among the errors the GAO said the Air Force made was not adequately evaluating whether the Northrop plane could fly faster and outmaneuver the service's fighter and transport fleet."
Because if there's one thing that a TANKER needs to do it's outmaneuver a fighter. You're doin' one heckuva job there, GAO.

Jeff, you should be happy about this decision. It's going to do wonders for McCain's fundraising. He can shake down all of EADS lobbyists again to get them to contribute before he intervenes on EADS behalf in the bidding, just like he did last time around.

It certainly should, if for no other reason than jobs, jobs and more jobs!! Where is Northrop Grumman, the U.S. lead contractor in this curious deal. Why are statements of this deal originating out of Spain, where EADS, a European Conglamorate, is headquartered. Why hasn't the President and Chief Operating Officer, of Northrop Grumman, Wesley Bush been heard from, concerning this deal !!? I hope they don't have anything to hide. Who is this Wesley Bush? I'm sure he doesn't have anything to hide so let's hear from Mr. Bush. Let's keep those jobs here in America, we don't need to convert Airbus jetliners into Air Force tankers. We have a capable and diligent workforce here, in America. Keep those jobs here in America !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

I just want to get you guys on the record with this, you agree with the GAO that a tanker, which carries millions of pounds of fuel, should be able to outmaneuver a lighter fighter and and transport fleet?
That's not outrageously ridiculous to you, as it obviously wasn't to the swamp writer who wrote it?

Jeff, if you knew what you were talking about, you'd know that the speed and manueverability of tanker aircraft is of critical importance. Since the plane is required to fly in very close formation to both fighter and transport aircraft, it must be able to maintain speeds to allow the other planes to continue to operate withing their saftey limts, and must be able to react quickly to movements from the planes being refueled, which are flying in extremely close proximity. No one but you is suggesting that the tankers are going to out dogfight fighters, it is a discussion about the safe operation of the aircraft, and it's ability to safely refuel the entire spectrum of the current Air Force fleet of aircraft. Refer to page 28 of the GAO report.

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